Portugal's government has given a “no” to the oil consortium Galp-Eni which had asked for test drilling contract extension for a further year to December 2018.
In a surprise move, the Government refusal to extend the contract, signed with the consortium to enable it to drill off Aljezur, stating that local councils potentially affected need to agree the extension.
The citing of the new law that gives councils an advisory role in any oil exploration and drilling plans is a major step in the right direction but overstates the leglislative weight given to councils’ contributions.
In December 2016, at the request of the Galp-ENI concession, the initial contract period was extended by one year. This gave the right to explore, research, develop and pump oil in the Lavagante and Santola zones until December 2017.
The consortium delayed and planned to start drilling in the Spring of 2018, well outside the contract period. Galp-ENI assumed it would receive permission from a hitherto complicit government whose encouragement of the nascent industry is well documented. This assumption has not paid off.
The concession holder had submitted a work plan, that was authorised by the National Entity for the Fuel Market, covering a three month survey period to start sometime between March and April 2017. This work was not carried out and delays through this year means the concession holder is running out of time.
On behalf of the government, the Secretary of State for Energy, Jorge Seguro Sanches, denied the extension and has pointed the consortium to the August 18th law that required ‘prior consultation’ with the local council before any work plan can be approved.
With Aljezur and Odemira councils among the most ardent detractors of an oil industry starting its operations off their pristine sections of coastline, it is extremely unlikely that either will give a positive assessment, dependent as these councils are on tourism, clean beaches and a publicity thrust that emphasises the purity of nature to be found on land and along their seashores.
Laurinda Seabra, speaking on behalf of the anti-oil association ASMAAS, views today's news “with a large dose of scepticism and not as a ‘good news’ item as the ‘Títulos de Utilização Privativa do Espaço Marítimo’ (TUPEM) licence is still in place until 11 Jan 2018.
“Secondly, although there's been prompt reply by the National Entity for the Fuel Market (ENMC), stating that surveys carried out off Aljezur between 2 and 9 of September had nothing to do with oil drilling, the fact is that at the same time the authorised drilling ship SAIPEM12000 (pictured below) moved into a location that is just one week away from concession area.
“Thirdly, the Galp-Eni consortium often has stated in the press that it is ready to proceed at short notice. As a result our advice to all, is to be alert and be prepared to have to take action at very short notice. Don’t be fooled into thinking it’s all over.”
There remains much to be done to reach the consensual objective of Portugal various anti-oil movements, which is to scrap the oil exploration, drilling and extraction licences and dissolve the concession area construct that covers much of Portugal’s maritime zone.
On the plus side, Jorge Seguro Sanches is part of an administration that has overseen the impressive growth in Portugal's tourism earnings, the current star in a resurgent economy, and may be in the vanguard of a shift from carbon-based energy sources to CO2 reduction through renewables, in according with the various international agreements which Portugal's government already has signed.
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